Client Profile
BoardRoom’s client, a multinational conglomerate with a diverse portfolio, operates through subsidiaries in various jurisdictions, including Indonesia, Malaysia, Philippines, Thailand and Vietnam. As part of its corporate strategy, the client is exploring tax-efficient options for repatriating profits via dividends and royalties from its operating subsidiaries.
Specifically, the client is evaluating two jurisdictions—Singapore (SINGCO) and Hong Kong (HKCO)—for establishing the Investment Holding Company and the Intellectual Property (IP) ownership in order to maximize tax efficiency in profit repatriation.
BoardRoom Group’s 2-Step Tax Approach
In assisting the client to achieve its tax-efficiency objectives, BoardRoom adopted a two-step approach:
The first step involved the assessment of the tax regimes of Singapore (SINGCO) and Hong Kong (HKCO) to determine the tax-optimal location for establishing the Investment Holding Company and IP ownership.
Key considerations included corporate tax rates, availability of tax incentives and exemptions, application of tax treaties, as well as economic substance requirements.
In the second step, BoardRoom evaluated the corporate income tax implications of repatriating profits via dividends and royalties from the operating subsidiaries to SINGCO and HKCO. The assessment focused on domestic and treaty withholding tax rates, tax exemptions and the overall tax burden associated with each jurisdiction.
About BoardRoom
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BoardRoom offers leading business solutions, including corporate and advisory services, in the Asia-Pacific region. We provide accurate, prompt and reliable corporate solutions for every element of your business.
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Recommendation: Overall Consideration of Tax and Non-Tax Factors
Based on BoardRoom’s tax assessment, recommendations were given to the client on a tax-optimal location for establishing the Investment Holding Company and IP ownership, as well asthe tax-optimal strategy for repatriating profits. BoardRoom’s assessment has considered both Singapore (SINGCO) and Hong Kong (HKCO) from various tax angles, including corporate tax rates, tax incentives, treaty benefits and the overall tax burden associated with profit repatriation.
The final decision also considered non-tax factors such as the client’s strategic business requirements and specific operational priorities, as well as the business ecosystem, regulatory environment and geopolitical stability in Singapore versus Hong Kong.
By incorporating both tax and non-tax factors into its decision-making process, the client can confidently move forward with its tax-efficient repatriation strategy, while ensuring compliance and minimizing tax risks.
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